By James Ledbetter 

It’s been widely reported on Friday that Newsday, one of the papers in the Tribune (TXA) stable, is being courted by three of New York’s oversized businessmen: James Dolan, the head of Cablevision (CVC); Rupert Murdoch, the chairman of News Corp (NWS), which owns the New York Post; and Mort Zuckerman, chairman of Boston Properties (BXP), who also owns the New York Daily News and U.S. News & World Report. Tribune, having recently been taken over by Sam Zell, may be in the mood to sell, given the miserable numbers they filed yesterday: a fourth-quarter loss just shy of $79 million, compared to a $239 million profit the previous year.

Newsday is big (10th largest paper in the U.S. in weekday circulation), profitable and actually has the distinction of being a pretty good newspaper, which you wouldn’t say of all the Tribune papers. Its Web site has grown rapidly in recent years. You can read the New York Times story linked above for more background, but here’s the important sentence:

Newsday illustrates the paradox Tribune faces: The best way to raise cash to meet short-term demands is to sell the very same properties the company would want to keep in the long run because they generate healthy profits.

There is a thick, dolorous irony here. For a little more than a decade - back before the Times Mirror chain merged with Tribune - Newsday published a New York City edition that competed directly with the News and Post. It struggled for years, as Murdoch and Zuckerman did everything they could to undercut it; the News used to air TV ads showing that the view from Melville, Long Island was a cow in a field, to underscore that the paper’s home was outside the five boroughs. (Never mind that the News’s owner for a good portion of that time was in Chicago, and then it was bought by a felonious Brit.)

New York Newsday finally began turning a profit in the mid-90s, even as the Post lost millions and the News “broke even” in its good years. But Times Mirror shut it down anyway, citing an insufficient rate of return.

Now the parent paper may end up in the hands of the guys who killed it. As Jimmy Breslin would say: Beautiful.

I asked Jim Dwyer, a Pulitzer-winning former Newsday columnist now at the Times, what he thought, and he said: “It’s hard to imagine anyone doing worse. Whoever ends up with it will make the current owners look like a combination of Joseph Pulitzer and Iphigene Sulzberger.”

Presumably the Justice Department would have to sign off on a purchase by either Murdoch or Zuckerman, but these are not men who let regulators stand in their way. I would almost say on principle Newsday should go to Dolan, except look what he’s done to the Knicks.

Here come the petrodollars. On the heels of this week’s investments in Citi (C) and Sony (SNE), Middle East entities are going to be kicking the tires on U.S. media properties, Liz Rappaport writes at TheStreet.com. She reports that real estate investment firm Blumberg Capital Partners is raising $500 million from investors in the Middle East for a fund that would target newspapers, movie studios, online media outfits, broadcast news and possibly radio businesses. The interest is fueled in part by the piles of dollars flooding places like Dubai and Abu Dhabi as oil prices near $100 a barrel. By way of comparison, David Wessel notes at The Wall Street Journal that the Abu Dhabi Investment Authority’s $7.5 billion investment in Citi amounts to the proceeds from a single week of U.S. oil imports. “Given that foreign dollar reserves eventually have to come home,” Michael Shedlock writes of the Citi deal, “this deal is just a token down payment for what’s to come.”